The Silk Road

There are few people who use Bitcoins that don’t know of the Silk Road. For those who are unaware, the Silk Road is a marketplace that some refer to as, “ of illegal drugs”. Not that illegal drugs are the only things you can buy there, you can also get your hands on a number of other illegal items and a few legal ones. Silk Road’s terms of service do state that, “anything whose purpose is to harm or defraud, such as stolen credit cards, assassinations, and weapons of mass destruction, will not be sold through the network.”

An operation like this would normally be shut down very quickly, but the site is a member of the deep web. In order to shut down a website you either need to turn off the server, or prevent messages being sent to it. Tor effectively prevents the location of the server from being found which leaves only the second option. This doesn’t work because there will always be exit nodes that aren’t owned by a group that wishes to shut down the Silk Road. The only other potential option is shutting down the whole Tor network. Given the amount of computers currently running Tor, shutting down the network would be extremely difficult.

Anonymity is king of the Silk Road, and that causes a slight contradiction. It is a marketplace that attempts to retain the anonymity of its users. Yet, buyers and sellers need some information from each other in order for any deals to be made. If a buyer could learn the identity of a seller then it would be far too easy for sellers to be busted for their illegal sales. This is where Bitcoins come in. Due to Bitcoin transfers being relatively anonymous sellers are given a measure of safety, but what of the buyers. They need to give sellers an address in order to receive their purchases. These purchases are usually sent through the normal postal service.

If there is a weak point in the Silk Road it is the buyer receiving their purchase. Unfortunately, for governing bodies, this tells them almost nothing about the person who sold the package. Since the sellers are virtually safe no matter what happens, governing bodies may as well publish false sales in an effort to catch buyers. They can also try intercepting the shipments to find out who the buyer was. Once the buyer is caught the only thing the governing body can do, besides charge the buyer, is seize their Bitcoins. This seems to be the current plan of the DEA.

Economics of the Silk Road

Economic data on the Silk Road is hard to come by and only one source is available. The research done by Christin, Nicolas covers data from February 3rd, 2012 to July 24th, 2012. According to the paper an average of 1,335,580 Bitcoins were traded every 29 days. This accounted for 4.5% to 9% of all Bitcoin transactions in a 29 day period. If this rate held, the operators of the Silk Road would make 1.1 million dollars a years. The amount traded on the Silk Road is by no means a small amount, but the total amount of trades that treated Bitcoins as a commodity instead of a currency still far outweighed the Silk Road transactions.


EuroArms is a Bitcoin market that is devoted to guns. Information, on EuroArms, that can be found on the normal web is fairly scarce, but they are one of the largest gun trafficking sites that make use of Bitcoins.

EuroArms was picked specifically because they sell guns only to people in the European Union and their guns are sold without ammunition. This makes knowledge of EuroArms largely useless to the majority of readers.

Due to the nature of EuroArms sales, all guns are unregistered and illegal to own in most parts of the European Union.

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